The True Cost of Open Source

It's a siren song: open source software for free. In these lean budget times, it has lured many schools into making decisions they've later regretted. While open source can be a fantastic option, the lack of a sales tag is probably the least important factor in deciding what course to chart.

As Chris Coppola, CEO and cofounder of rSmart, points out, licensing fees are often the smallest overall expense associated with software, so it doesn't make sense to home in on open source's lack of these fees. Instead, he says, schools should focus on the costs associated with installing and maintaining the application at peak efficiency.

Regardless of whether a project is open source or proprietary, these cost categories are often the same:

Licensing and maintenance

Implementation and integration

Training and technical support

Hardware and data storage

The trick for schools considering an open source solution is to figure out how much they will have to spend in each of these categories. Here are some issues to consider:

Community Support
Some large schools have the IT resources to implement, customize, and manage open source solutions internally. For others--particularly small schools--such resources are simply not available. Instead, they must look to the outside community for support. In considering any open source solution, IT leaders at Central Piedmont Community College (NC) ask two important questions: How active is this community? Are there several third-party providers available to help?

In the vast majority of cases, the answer to the latter question is yes, says Ken Ingle, CPCC's executive director of emerging technology. "We have to ask ourselves, 'Should we host Moodle ourselves or use Moodlerooms?' The answer may change over time, so we have to reevaluate."

The presence of an active community is also a key consideration for Oakland University (MI). "If an open source product doesn't have a healthy community around it, it tends not to do as well," notes Theresa Rowe, the school's chief information officer. "But with Moodle and uPortal, we have found healthy communities around them and all types of support options available, even ones offering services on an hourly basis."

The strength of these communities is tested most when an open source system runs into problems. Without a commercial vendor to blame, "You have the 'no-throat-to-choke' problem," says John Lewis, chief software architect for Unicon, an open source services firm. "If the system is broken, you have to get it fixed."

An active open source community will help you fix it, and may actually be more responsive than a commercial vendor, he adds. But you are dependent on the kindness of strangers, with no service-level agreements.

Both proprietary and open source software applications require maintenance and upgrading. With open source, however, a variety of vendors offer a wide range of support options, ranging from hourly rates to full-fledged maintenance plans--allowing schools to choose an approach that fits their budgets. As a result, some IT administrators find that open source service providers are more affordable than the commercial side.

Minimize Customization
If you are looking for a way to drive implementation costs down on enterprise projects, customize as little as possible, says Coppola. He urges schools to consider community-sourced projects such as the Kuali Financial System (KFS) for one simple reason: Because professional users design them with their own needs in mind, there is often less customization required.

Consider the case of Colorado State University. When the board of governors authorized the school's KFS implementation in 2006, the cost to purchase a commercial, off-the-shelf financial system was around $7 million. In contrast, the total cost for the KFS implementation came to less than $2 million, with annual upkeep averaging $150,000. "Our executive team was so convinced this was the way to go that we didn't even do an RFP," notes Patrick Burns, dean of libraries and vice president for IT.

The cost is lower in part because higher education officials are involved in the design of Kuali, Burns says. A community of chief financial officers and purchasing directors agree on common business practices and then develop tools to support them. As a result, there is less customization work for universities to do.

Part of the $2 million went to consulting help from rSmart during the initial implementation. In Burns' experience, rSmart came in "less expensive than comparable support help with traditional systems, and more productive," he says. "We are also implementing the Kuali Coeus research-administration system, and the tight integration between it and KFS is something no commercial vendor could offer us."

Incremental Rollouts
Unicon's Lewis argues that cost overruns tend to be less frequent in open source implementations than in commercial equivalents, not because of any inherent virtue of open source, but because they are rolled out differently.

"With something big like a proprietary ERP, you are paying six or seven figures for the licensing, so you have this huge capital expenditure," he explains. "You have done an RFP based on some scorecard. Then, when you go to do the systemwide implementation, invariably you realize you have made mistakes and have made some false assumptions. Dealing with those issues can drive up the cost."

With enterprise open source, on the other hand, universities tend to start small as a proof of concept--and scale up from there if it works.

Oakland's Rowe also believes open source is easier to roll out incrementally. With a commercial solution, schools are under pressure to do the whole implementation at one time, she notes, because the vendor wants to move on to the next customer. Still, an incremental rollout does carry some risk: "If you approach a project thinking you can customize and change everything, whether in open source or commercial software, that is going to be detrimental to success."

When Commercial Is Best
In deciding between open source and commercial solutions, universities should do due diligence on a case-by-case basis. Even then, they may have to change direction. "We found an open source approach to a digital repository with Fedora to be expensive and time-consuming," acknowledges CSU's Burns. CSU had to devote two full-time employees with expertise to an effort with the Colorado Alliance of Research Libraries. The costs were significant, and the implementation was dragging. "We finally pulled out of that project and went with a commercial product, DigiTool from a company called Ex Libris, for a quarter of what it was costing us," he recalls.

"The single biggest factor to consider is whether your institutional culture is DIY (do it yourself)," says Coppola. Indiana University, for instance, has relied on its DIY culture for years and has designed software to improve efficiencies on campus. "But a small school might just be looking for the best software it can find at the lowest price," notes Coppola, and a commercial offering might work best.

More Than Cost
For every initiative, Oakland University does a five-year analysis covering everything from software licensing to implementation and support, hardware, data integration, backup, and the number of full-time employees needed, says Rowe. "We get bids and look at comparable open source solutions. It really is a case-by-case basis as to which looks like it is going to be more cost-effective."

Ultimately, though, cost is trumped by functionality. "We are operating in an atmosphere of constrained spending and are asked to be much more efficient in our solutions," Rowe explains. "Cost is important to us, but it is only one of the factors. A cheap system that doesn't work well doesn't suit us."

What to Ask Up Front

In a recent Educause presentation, Ken Ingle, Central Piedmont Community College's (NC) executive director of emerging technology, recommended asking the following questions before proceeding with an open source project:

Who are the key players in the community and how long have they been around?

Does the solution support a potential move or cloud option?

Do you have the internal resources to support an open source solution?